A credible performance appraisal regime is needed
The topic of performance appraisal has been hot news since the recent decision by Accenture to scrap their annual performance appraisal system, was announced. However they describe the reasons why they have scrapped the formal performance appraisal, mostly there is only one reason such a system will fail to work, is because it lacks credibility.
Whether your performance appraisal system is newly introduced or has been operating for some years, a common issue for many organisations is whether or not it is credible with employees, stakeholders and customers.
Gaining credibility is absolutely vital if your performance system is linked to pay and reward particularly.
The following 7 steps set out how you can gain the trust and confidence of all.
1. Your system is clear about the elements of performance to be reviewed and those elements which count towards a performance rating.
Not all performance will count towards a rating. Managers might be required to evaluate a number of different aspects of performance such as giving an individual feedback on their skill set, their ability to apply knowledge, or how they do their work.
A performance rating, on the other hand, will likely be based on employee contribution usually measured against whether they have achieved pre-determined objectives or specific tasks that are linked to business objectives.
2. Feedback is grounded in facts and expressed impersonally
The review is likely to include both objective and subjective feedback. Objective feedback is about facts, data and evidenced information. Subjective feedback is likely to be relational and can be skewed by individual opinion. It is important that managers understand when giving subjective feedback they deal with behaviours, not personalities. So for example. “You are rude and it upsets the customers”, would be better expressed “What you said upset the customer and it resulted in a formal complaint”.
Some performance appraisal systems lose credibility because managers rate their employees based on subjective criteria. Some poor behaviours can be clear cut, but more subtle problems can be subjective, for example in the above situation, one customer might have simply taken something said in all innocence the wrong way.
3. Understand different personalities have different needs
Managers benefit from being aware of their own and others’ different personality types. Understanding type is easy and an essential skill in a manager’s toolkit. Simple understanding can save much conflict, resistance and misunderstanding, as people respond differently to differing styles of giving and receiving feedback depending on their individual needs.
4. Focus on conflict resolution
Unless you have a team made in heaven, inevitably, giving performance feedback has the potential to create conflict. If managers understand their own conflict resolution style they can identify those likely situations and understand the best way to prevent, identify and resolve conflicts.
5. Ensure effective quality control
A credible quality control system is essential if performance pay is linked to performance review. This might include for example:
- Ensuring that HR or third party managers undertake independent reviews of findings
- Introducing focus groups that can anonymously challenge results and ratings on behalf of both teams and/or individuals.
While some of these ideas may be time-consuming, they will prove worthwhile if an individual or legal challenges are eliminated.
6. Sell the benefits
Sell the benefits of measuring and rewarding performance, eliminate the impression it is a “tick box” activity. Celebrate success when the system works, making it clear the objective is to help get the best out of people, give them credit for work done well, as well as boosting performance and results.
Conversely, be careful not to let the system become identified with a hire-and-fire mentality. If you have big performance issues, sort them out separately and immediately, not through the performance management system. The performance management system should be seen as a tool to improve performance rather than to exit people.
7. Provide clear guidance
Make sure that your guidance, policies and procedures are simple and transparent so that everyone can understand and sign up to them.